[Marxism] The Influential Minister Behind Argentina’s Economic Shift
lnp3 at panix.com
Mon Jan 27 07:18:39 MST 2014
NY Times Jan. 27 2014
The Influential Minister Behind Argentina’s Economic Shift
By SIMON ROMERO and JONATHAN GILBERT
BUENOS AIRES — As Argentina absorbs the shock from a sharp plunge in its
currency, President Cristina Fernández de Kirchner’s mercurial young
economy minister, Axel Kicillof, a scholar with rockabilly-style
sideburns and an aversion to business suits, is emerging as the face of
policy shifts that are sending tremors through financial markets around
the developing world.
Mr. Kicillof, 42, is wielding greater influence over an array of areas,
from Argentina’s oil industry to the government’s attempts to slow
capital flight and improve relations with international creditors, as
Mrs. Kirchner remains largely absent from the public eye after
undergoing surgery in October to drain a blood clot near her brain.
The rise of Mr. Kicillof, whose writings use Marxist concepts to
interpret the work of the British economist John Maynard Keynes, points
to efforts by the authorities to assert greater state control over
Argentina’s economy at a time when growth is slowing significantly and
inflation is soaring.
“He’s the strongest economy minister Argentina has had in a decade,”
said Ezequiel Burgo, the author of “The Believer,” a book about Mr.
Kicillof. “He’s confrontational, outwardly self-confident and sometimes
perceived as being arrogant, which of course makes him stand out at a
time like this.”
Before advising Mrs. Kirchner on economic matters, Mr. Kicillof taught
economics at the University of Buenos Aires. He rose to prominence as a
deputy minister in 2012 when he directed the nationalization of YPF, the
Argentine oil company then controlled by Repsol, the Spanish energy giant.
He has repeatedly justified the seizure of YPF, which Repsol had
acquired in 1999, in pointed critiques of Argentina’s economic policies
in the 1990s of fixing the currency to the dollar and selling state
assets. In November, while reviewing Argentina’s offer to compensate
Repsol for its stake in YPF, he contended that authorities had
previously laid the foundations “for the pillaging of our companies.”
Since Mrs. Kirchner named him economy minister in November, Mr. Kicillof
has been thrust into the spotlight.
Paparazzi trail him around his middle-class neighborhood, Parque Chas,
and a celebrity magazine has described his relatively modest lifestyle —
reflected in the car he drives, a compact 2008 Renault, and his decision
to forgo bodyguards on a vacation with his wife, a literature professor,
and their two small children.
One columnist for the magazine Noticias went so far as to examine the
psychology of Mr. Kicillof’s sideburns, questioning whether they fit
within a rock ’n’ roll tradition of chafing at authority, or within the
fashions of 19th century Argentine political leaders who sought to
display virility and power.
Mr. Kicillof has shown a flair for clashing with critics. In an
interview published on Sunday by the pro-government newspaper Página 12,
he warned against what he called “disinformation” campaigns on social
media networks that could destabilize Argentina’s financial system.
“Economic phenomena can have this magic,” he said, referring to the
circumstances around some bank runs. “They are self-fulfilling
prophecies, results of a herd mentality which have no real cause.”
In a country where Freudian therapy and brooding are rooted in the
popular culture, Mr. Kicillof, the son of a psychiatrist and a
psychologist, accused his opponents of generating “psychosis.”
Born to middle-class parents who prized intellectual achievement, Mr.
Kicillof grew up in Recoleta, an elegant neighborhood in Buenos Aires.
His father committed suicide when Mr. Kicillof was 22, according to Mr.
Burgo’s book. Mr. Kicillof’s mother is a prominent psychologist. Before
he became a fixture of Argentina’s political establishment, Mr. Kicillof
gained notoriety as a leader of an anti-establishment student
organization at the University of Buenos Aires, where he went on to earn
his doctorate and lecture against orthodox economic theories as a professor.
Mr. Kicillof also gained a reputation for being obsessed with numbers in
some industries. After he began requesting spreadsheets from oil
companies with details of wells, investments and production, the news
media here reported that industry executives began calling him Excel,
after the Microsoft spreadsheet application.
While he is sometimes criticized for his leftist views by Mrs.
Kirchner’s opponents, he has also led a shift in the government’s
policies as Argentina seeks to regain access to global financial
markets, following the country’s default on its foreign debt in 2002
during a severe economic crisis.
For instance, with Mr. Kicillof at the helm of the economy ministry,
Argentina has begun discussions with Repsol over compensation for the
seizure of its shares in YPF. Argentina is also trying to appease the
International Monetary Fund, which censured the country in 2013 over the
accuracy of its economic statistics, by releasing a revised inflation
index next month.
In an attempt to obtain a $3 billion loan from the World Bank, Argentina
has also settled disputes through the bank’s arbitration body with five
companies claiming a total of more than $650 million. This month, Mr.
Kicillof traveled to France to discuss with creditors the repayment of
Argentina’s estimated $10 billion debt.
But as Argentina tries to halt a plunge in the central bank’s
international reserves, Mr. Kicillof’s critics have also grown more
outspoken, arguing that he helped create some of the problems he is now
trying to solve.
Alfonso Prat-Gay, a former president of the central bank, called Mr.
Kicillof’s recent maneuvering “a scandal,” especially in relation to
Argentina’s renewed efforts to reach an agreement with foreign creditors
and the sharp fall of the peso. “You don’t solve things with a
devaluation, but with a credible economic program,” Mr. Prat-Gay told a
local radio station.
Some people here believe Mr. Kicillof is out of his depth in government.
Héctor Zumárraga, 68, a labor rights lawyer, said: "He’s not up to the
job. He doesn’t understand that it’s not enough to know just economic
theory, and we’re seeing proof of that now."
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